One of the hottest gift items this Christmas just got a huge endorsement from Wall Street

That's one reason why Barclays analysts have become more bullish on Fitbit.

In a note on Monday, they upgraded the stock to "Overweight" from "Equal Weight" and left their price target unchanged at $49.

The analysts say, "FIT is the fastest-growing meaningful consumer company in the world at 140%+ revenue y/y in 2015 (in a world lacking true growth stories)," and therefore, "we believe the current valuation levels are just too compelling to ignore."

Fitbit shares rallied by as much as 4% in pre-market trading on Monday. Since the IPO in June, they have fallen about 3%.

Barclays' Matthew McClintock and team wrote: "Holiday 2015 got off to a muted start for the retail industry but wearables appear one of the winning product categories of the season: FIT was less discounted than peers over the weekend yet was the brand of choice according to our channel checks. FIT also dominated wearable marketing efforts for the holiday from our observations."

In June, data from Slice Intelligence showed that Fitbit sold more than 500,000 units per week during the 2014 holidays. Before that, none of the popular wearables makers (like Samsung, Garmin, and Jawbone) were selling more than 50,000 units per week.

The Barclays analysts noted recent commentary from Target, which said it saw nearly 100% growth in comparable sales of wearables, and from Kohl's, which got "significant market share gain in the active and wellness business."

And after people get Fitbit watches as Christmas gifts, they'll tell all their friends, who would also get theirs.

"While we expect meaningful sales upside from holiday strength, we are even more optimistic about the potential networking effect benefit that should occur in 2016 from user growth related to these sales."

They noted that Fitbit has been spending a ton on marketing for this holiday season, and forecast that the company would spend more in sales/marketing in the fourth quarter than during all of 2014.

Besides the forecast boost from broad demand for wearables as a gift item this year, the Barclays analysts say that concerns about competition from Apple Watch and others are overblown, at this point.

They noted that Fitbit's revenue growth rate was faster in Q2 and Q3 this year, than in the same quarters last year when Apple Watch had not yet launched.